When it comes to children and money, it’s a clear case of ‘learn now or pay later’. Research by ME with 1,000 Australian adults confirms that the way we handle our finances as an adult is strongly influenced by our childhood experiences with money.

It seems us parents deserve a pat on the back!

According to the survey, around seven out of 10 Australian adults describe themselves as ‘effective savers’, and the majority (67 per cent) say they had parents who were good role models for managing money when they were growing up.

How should pocket money be handled by parents?87380

How should pocket money be handled by parents?

08 Dec 2016

Here are some of the ways parenting can influence a child’s way with money.

Money talk matters

ME found 74 per cent of effective savers were involved in money discussions with their parents when they were growing up. This finding confirms results from the OECD’s 2015 Programme for International Student Assessment (PISA) tests, which found that in 10 out of 13 countries, the simple act of parents chatting about money matters with their children is associated with higher levels of financial literacy.

Pocket money provides useful skills

Paying children pocket money is a practical step that can help children grow into fiscally responsible adults.

One in two effective savers say they received pocket money as children, and parents can help saving and budgeting become even more meaningful for their kids by opening a dedicated savings account for their child.

Learning begins at an early age

Like many skills, developing sensible money habits can be easier if we start young. That’s because kids closely watch and listen to their parents, soaking up reams of information about money – good and bad, and forming early views about how it can shape their lives.

This is important because parents’ attitudes to money can have a lasting impact on the way their youngsters – and later young adults – handle money themselves.

The bottom line is that parents shouldn’t feel uncomfortable about sharing the benefit of their own money experiences with children. Adding to this, the study confirmed 40 per cent of adults wish they had been taught more about money at home.

Make money chats a habit

Raising kids is no easy task, and there’s a lot to pack in during the first 18 years – everything from toilet training through to teaching them how to drive.

But if you can add simple lessons about how to handle money to the list of parental responsibilities – even if it just means having casual conversations about money – you’ll be doing your bit to help your kids become financially savvy adults.

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